Antitrust: AMD, Intel, and the cases in between

The upcoming litigation between AMD and Intel, as well as the various ongoing …

It all started in Delaware

It has been three-and-a-half years since AMD first filed an anti-trust against Intel in the state of Delaware, and while the case has yet to come to trial, its size and complexity have ballooned considerably. Many of the other ongoing Intel anti-trust investigations around the world are tied, directly or indirectly, to the discovery and deposition process, and the situation is further complicated by the involvement of various judicial systems, each of which has its own specific rules and methods for evaluating AMD's complaint.

This article describes the four major legal arenas in which Intel and AMD are preparing to do battle. There are other cases besides the Delaware suit—Intel representative Chuck Mulloy indicated several dozen class action suits have been filed in the wake of AMD's 2005 lawsuit. But these cases hinge on the results of the Delaware case. That initial lawsuit is more-or-less the center of the other investigations, though the situation is more complex than that.

Current investigations/cases

AMD vs. Intel: This is the lawsuit AMD filed against Intel, and it's the case most people are referring to when they speak of
AMD's antitrust suit. AMD filed this suit in 2005, alleging that Intel had unlawfully abused its dominant position in the market.
This case is currently scheduled to begin trial in February, 2010, after several previous delays. This is also known as the Delaware
case.

The EU investigation: The EU's investigation of Intel's behavior and pricing policies. The EU has kept a case file open
(and an eye on) Intel since 2000, but the body actively resumed its investigation following complaints
from AMD. Currently, the EU Directorate General for Competition has filed both a Statement of Objections (SO) and a Supplementary
Statement of Objections (SSO). The two documents were filed on July 26 2007 and in late July, 2008.

Intel recently filed an appeal with the Court of First Instance, asking that body to order the Directorate General for Competition (DG
-COMP) to request certain documents as part of its evaluation. These documents, Intel feels, are necessary to its own defense.

FTC investigation: Last year, the freshly appointed chair of the FTC, William Kovacic, announced an investigation into
Intel's competitive behavior. His decision marked a departure from the FTC's previous position; former chairwoman Deborah Majoras
repeatedly refused to open a formal inquiry into Intel's behavior, even when asked to do so by lawmakers. Majoras left the FTC to
take a position with Proctor & Gamble's legal term; her former chief of staff, Brian Huseman, is now an Intel employee.

New York State investigation:

Almost a year ago, New York State Attorney General Andrew Cuomo announced an
investigation into Intel's behavior and competitive practices. Cuomo explained the decision as one that would benefit New York
citizens, saying: "After careful preliminary review, we have determined that questions raised about Intel's potential anticompetitive
conduct warrant a full and factual investigation. Protecting fair and open competition in the microprocessor market is critical to
New York, the United States, and the world." It should be noted that Cuomo's decision to launch an investigation (and his sudden concern over Intel's behavior)
came after AMD had announced its own plans to build a next-gen fab facility in New York State.

The Delaware Case

The Delaware case is where both AMD and Intel have chosen to focus their discovery, the results of which are staggering. AMD has turned over some 50 million pages of documents to Intel, while Intel has given AMD 150 million page-equivalents of its own. At least 1100 depositions are either scheduled or have been taken; the total amount of information put forth by the two companies combined is said to dwarf all previous trial records.

Because it's illogical and impractical to repeat all this effort across each case, the Delaware document pool is being used in all of the relevant cases. That doesn't mean that all of the records for each case are included in Delaware, but a great deal of important information relevant to more than just one of the investigations/lawsuits is present in the suit AMD filed against its larger rival.

The nature of AMD's complaint and the relationships both manufacturers have with their various partners requires that a significant number of the documents deemed relevant to the case contain information from third parties. For a number of OEMs the fight between AMD and Intel isn't necessarily one they wanted to be involved in. Supporting a company, either company, unofficially from the sidelines is one thing; testifying in a court case is something altogether different. AMD and Intel both have their own reasons to keep certain documents under wraps—no OEM likes finding out they were second on the list for parts during a shortage.

For these reasons, as well as others, the various companies involved in the discovery process have signed confidentiality agreements with each other. Many of the documents within the case file cannot be shared or disclosed save under specific circumstances.

The Delaware case is characterized by a subtle distinction in argument that may or may not have been advanced in the EU. As previously stated, AMD's filings allege that Intel abused its market position, essentially gave away processors for free through rebate systems, and violated the rules of fair competition by penalizing manufacturers for buying AMD parts. The specific details of how Intel allegedly accomplished all of this is outlined in the company's filing (PDF), if you care to read it.

Intel doesn't directly rebut AMD's claims beyond declaring itself innocent. Instead, Intel argues that in order to order to claim it abused its dominant market position, AMD must prove that Intel caused harm to consumers. Such harm is often defined as artificial price inflation, and that's a very tricky claim to make in a market where the highest-end product from two years ago may be a sub-$100 part today.

The difference can be summarized as follows: AMD claims Intel competes unfairly; Intel claims AMD must prove its actions hurt customers. The importance of proving consumer harm (according to Intel) is more a focus in the US than in the EU, as we'll now discuss.